Millions of households across Great Britain are facing higher energy bills this winter after Ofgem announced a 4% increase in the energy price cap from October.

The energy regulator confirmed on Wednesday that the cap will rise from £1,663 to £1,723 a year for a typical household paying by direct debit and using both gas and electricity. The new rate will apply from 1 October to 31 December 2026.

Ofgem said the increase is primarily being driven by higher wholesale gas prices, which have risen amid continuing instability in global energy markets. Gas costs are expected to rise by around 8%, while the government's removal of VAT from domestic electricity bills is helping limit the overall increase.

Around 22 million households on default tariffs are protected by the price cap, while approximately 11 million households on fixed tariffs will not be directly affected by this particular increase.

Ofgem has urged households struggling with bills to contact their energy suppliers, while highlighting fixed tariffs that it says can be cheaper than the new price-cap level.

The announcement is likely to add fresh pressure on household budgets as Britain heads towards the colder winter months.